Should City's Debt Relief Come from Redevelopment Coffers?

During a March 16 meeting, Centre City Development Corporation's board of directors rejected a proposal from the mayor and city council to pay off $228 million in debt owed on a previous expansion of the convention center.

The proposal was first presented last November in a memo from councilmembers Kevin Faulconer, Carl DeMaio, Todd Gloria, and Marti Emerald. The memo asked that CCDC start making payments of $9.2 million per year, increasing to $13.7 million by 2016, as a way to free up needed money in the City's shrinking annual budget.

Before the vote, CCDC's executive vice president Frank Alessi informed the board of the financial impacts to downtown's redevelopment agency should the board support the city council’s recommendation.

If CCDC were to take on the debt, said Alessi, by 2014 there would little to no money in CCDC's coffers to spend on new development. Instead, the $38 million set aside for projects during that year would be used to balance a $34 million deficit.

During the meeting, Alessi also provided board members with an alternative that proposed the downtown redevelopment agency start on a payment plan. The plan called for CCDC to pay $2 million in fiscal year 2012, each subsequent year the payments would increase by $500,000 per year until the $9 million annual payment is reached in 2026.

Board members were not thrilled about either proposal.

Former port commissioner and CCDC board member Laurie Black stressed the importance of using downtown redevelopment funds on downtown and responded to one city councilmember's frustration that too much redevelopment money is spent downtown and not in low-income areas.

"I want to meet with councilmember [David] Alvarez because I don't think [he] understands that what is happening in his redevelopment area is completely different," said Black. "I hope we can keep it together and not have a tsunami here in downtown."

Board chairman Kim Kilkenny also had a word for the media. "I am consistently annoyed and disappointed with press reports that suggest that this is developer versus teachers when this is really downtown's economic future at stake."

Alessi and CCDC staff will appear at the March 29 city council meeting to inform the council of the board's decision.

Comments

Tsunami, Laurie Black? Yes, we should think about that...and how foolish we are to build our downtown on the mudflats of downtown. (Maybe that's another story that needs to be written...just how much damage a similar quake and tidal surge would do to San Diego.)

Kim Kilkenny is peeved with writers who point out that redevelopment takes money from schools? Then maybe he should stop taking money from the teachers.

Isn't Alessi the clown who lied to the council about when the secret meetings took place, and refused to answer point blank questions about CCDC? Why hasn't he been fired?

CCDC outlived its usefulness long ago. As Reason magazine reports on California redevelopment, "You’d need to go back to the crew of the Enola Gay to find a group of Americans responsible for creating so much vacant urban space."

Abolish CCDC. Enough of these fraudsters stealing from the poor to give to the rich.

Draining the CCDC coffers to help pay for city services sounds like a marvelous idea. That would mean that the CCDC could no longer give subsidies to developers. The more marvelous idea is to abolish the CCDC altogether and have the tax dollars going into higher priority uses such as repairing infrastructure and paying for public safety.

Just what Black meant by a "tsunami" in downtown is not clear at all. It probably had to do with a failure to keep building economically unsound structures, and allowing some spots to stay vacant. But whatever it meant, the metaphor is absurd, and unworthy a person in her position.

As to whether "this is downtown's economic future at stake", one can take that in many ways. If it means that projects, using private capital, that stand a chance of success and a strong chance of paying for themselves will be the only ones built, that's good. If he's proposing that foolish uses of public funds on such things as a new football stadium and an expansion of an already-underutilized convention center, that isn't good.